You have a business based in Australia that has just imported a product from a seller in Mexico. The invoice for this purchase is denominated in Australian dollars (AUD) and must be paid in 30 days. That is, you will pay for your purchase in AUD.
Given this arrangement, what is the exchange-rate risk you face as an importer?

Question

You have a business based in Australia that has just imported a product from a seller in Mexico. The invoice for this purchase is denominated in Australian dollars (AUD) and must be paid in 30 days. That is, you will pay for your purchase in AUD. 
 Given this arrangement, what is the exchange-rate risk you face as an importer?

Accepted Answer

You face no exchange-rate risk since you make payments in AUD.

Answer

Mexico borders the USA so you are exposed to the AUD weakening relative to the USD.

Answer

The risk is that the AUD will weaken against the peso.

Answer

The risk is that the AUD will strengthen against the peso.

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You have a business based in Australia that has just imported a product from a s...

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